How Long Will You Work When You Should Be Retired?

Jul. 15, 2013 6:22 PM ET

You may have heard the popular legend about Eskimo tribes sending the elderly off to die at sea. As the stories go, when grandpa and grandma could no longer hunt or earn their keep, the younger folks would put them on an iceberg and ship them off. Fewer mouths to feed gave the younger generations a better chance at survival. I shudder at the thought.

In the farming communities where my grandparents lived, the older folks contributed whatever they could. As a boy, I spent many an afternoon shucking lima beans and husking corn with my 90-year-old great-grandmother. The garden and livestock provided enough for her children and grandchildren to support her in her old age. Fortunately for her, the Midwestern mentality was a little less harsh than that of the Eskimos.

Retirement is not a foregone conclusion for everyone, which begs the question: What is retirement?

A Working Retirement Is the New Status Quo

Does retirement mean you don't work? Not necessarily. One of my high school friends joined the navy at age 18 and retired with a nice benefits package at age 38. After that, he worked as a county sheriff for a couple of decades and received full retirement pay from that job as well. Many of my retired peers are still working; they just do something different than they did during their first careers. That includes your humble scribe. When I retired, I had no idea that, less than a decade later, I would spend the bulk of my free time typing away in front of a computer, sharing my experiences and investment guidance with people around the world.

The happiest retirees I know retired to do something they looked forward to and wanted more time for. I was not one of them. I loved what I did during my old career, but the hassles of international travel like racing to catch planes and living in hotel rooms were wearing me out. When I finally threw in the towel, I didn't care if I ever got on another plane again. My wife Jo and I spent a few years driving around the country in a motorhome, and then eventually we bought another home (not on wheels) and settled down.

At that point, I had retired from something I was beginning to hate, but I still needed to find something I enjoyed doing every day. Those folks who have a second career lined up when they retire seem to make the transition more easily. A second career may or may not bring in much income, but that is often secondary to enjoying the job. Jo and I have a friend who retired and became an artist. She is thrilled when one of her paintings sells, but even more thrilled that someone enjoyed her art enough to hang it in their home.

I feel the same way about Money Forever. It comes with financial rewards, but the real thrill comes from the nice emails I receive from readers around the globe. Knowing that I've helped folks who are in the same boat I am in makes my day. If you can do work you enjoy, something that's both emotionally and financially rewarding, why would you ever quit?

Some People Will Never Retire

I of course realize that many older folks work for different reasons. Unfortunately, many have to work to put food on the table. In my first career, I often used Abraham Maslow's Hierarchy of Needs as a teaching tool. Maslow categorized humans' physiological needs - food, clothing, shelter, etc. - as the first level of his hierarchy. Our caveman ancestors woke up hungry every morning and had to go hunt and gather food. When you are worried about feeding your family and your own stomach is growling, you can't spend a lot of time sharing your artwork on the walls of your cave.

Squirrels store nuts to survive through the winter, but over time man has become the best animal at storing nuts, so to speak. We went from hunting and gathering food as we traveled from place to place, to clearing and irrigating land for agriculture, to curing food with salt to preserve it, and then on to canning and now freezing foods. No matter the method, man's first goal has always been to survive today, tomorrow, and hopefully many tomorrows after that.

Most folks no longer store food in their farm cellars like my grandparents did. Instead, they save money and store it in banks and brokerage accounts. The beauty of money is that, unlike a can of peaches, it can grow while in storage. If we store enough money, it can provide adequate income to free up our time for other pursuits.

What about folks who can't retire, people who have to work until the grim reaper comes knocking? Maybe they worked low-paying jobs, were poor savers or investors, had bad luck, or as is more likely the case these days, were big-time spenders. Regardless of how it happened, these folks arrived at their autumn years and their storage bins were empty. No one wants to end up in that boat. Everyone wants enough money saved to retire at some point. Even people who want to keep working want work to be a choice, not a prerequisite for survival.

Are We in a Retirement Crisis?

The phrase "retirement crisis" is certainly tossed around in the news quite a bit, but what is the crisis?

To begin with, many seniors have not saved enough money to support themselves in their old age. These folks will either continue to work or end up depending on their children and/or public assistance. And old age is lasting a lot longer than it used to as medical advances continue to increase life expectancy. That means folks who saved enough for just twenty years or so of retirement are finding themselves in a pickle as their life continues on even as their savings dwindles; a long life is a blessing, but what happens when 95-year-olds can't pay their bills?

For those of us with a decent nest egg, our retirement crisis is a bit different. It involves growing our savings in a low-yield environment while protecting it from risky investments, predatory fees, and confiscatory taxes. These steps can keep us from becoming a burden on our families or anyone else, but they take work and a commitment to learning.

The truth is, our government has targeted seniors and savers. Congress wants to redistribute our nest eggs to appease their constituents (and donors); that's one of the major reasons the vast majority of incumbents continue to be re-elected and only a very few number of districts are even in play. It's a fact of life that's not likely to change, and we need to work around it.

My Kind of Retirement

For me, retirement means having enough money to choose how I spend my time. It could mean something different for you. Just like our readers, my wife Jo and I worked hard, saved, and made smart investments to get here. I'm sure most of you feel the same way.

Retirement means having enough money to really enjoy the things we want to do right up until the end. The retirement we envision involves being totally independent, not depending on the government or our family. In order to accomplish that goal, we must tend our garden and manage our nest egg wisely.

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Depending on your own circumstances, retirement may or may not mean you stop working entirely. That's your decision. But it should not mean having to work a job you no longer like, or taking on a minimum-wage job after retiring from your career just to make ends meet. It should mean living life on your terms, and that requires financial independence. From the very beginning our mission is to help you with that.

If you're interested in learning how to become financially independent, whether you're currently retired or a few years away, I'd like to invite you to try Money Forever with a 90-day risk-free trial subscription. In each issue of Money Forever, we share actionable, conservative, income-generating investment ideas to help you create your own path to financial independence - ones you can put in your portfolio today. Plus, you'll get detailed research on subjects important to anyone in or planning for retirement: annuities, reverse mortgages, financial advisors, etc.